Capital Gains Tax

Hi,

I have a query re Capital Gains Tax.

I am currently building a house which I intend to sell shortly after completion. I have heard that if I've lived in the house for six months prior to selling I won't have to pay CGT, otherwise I will. Is this the case?

Also, how is it determined when I've started to live there? Is it from when the ESB is connected? Or first bill?

Thanks in advance for any replies.

I have heard that if I've lived in the house for six months prior to selling I won't have to pay CGT, otherwise I will. Is this the case?

The only way to avoid CGT is if the property being built legitimately/actually becomes your Principal Private Residence (PPR) once it has been completed. However, this means that if you have an existing PPR you would need to move out of this and into the new property and this could have tax implications for the original PPR. Note that a married/cohabiting couple can only have a single PPR at any one time. If necessary Revenue will decide which of two or more options is actually one's PPR. There is no scope for "declaring" or "nominating" a particular property one's PPR. I'm not aware of any six month rule in relation to this whole area.

Given that the amounts involved (e.g. the amount that you stand to gain or lose in terms of CGT etc. depending on what you do) are probably significant you might be best off getting independent, professional tax advice on the matter.

Thanks for the reply.

Currently renting, don't own any other property so I guess this means that there won't be an issue with CGT, regardless of how long / short time spent living there as house will absolutely be PPR.

I guess this means that there won't be an issue with CGT, regardless of how long / short time spent living there as house will absolutely be PPR.

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Not my understanding (though I'm not an expert) - It is only your PPR if you live there.

Currently renting, don't own any other property so I guess this means that there won't be an issue with CGT, regardless of how long / short time spent living there as house will absolutely be PPR.

You probably should get independent, professional confirmation that your understanding is correct. As rainyday says a property is only your PPR if you actually live there. I never heard of the six month rule that you mention but that doesn't mean that it doesn't exist. If you are building this property specifically to sell on note that (a) you may lose your first time buyer status and (b) Revenue could decide that you are not a legitimate owner occupier of a PPR but are engaging in a trade by selling the property on. Best to get advice on this I reckon.

Thanks for all the help, will certainly get advice on it.